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US Threatens to Starve Iraq of Its Oil Dollars Over Iranian Influence, Sources Say
A general view shows al-Firdous Square in Baghdad, Iraq, July 27, 2022. Photo: REUTERS/Ahmed Saad
Washington has threatened senior Iraqi politicians with sanctions targeting the Iraqi state – including potentially its critical oil revenues – should armed groups backed by Iran be included in the next government, four sources told Reuters.
The warning is the starkest example yet of US President Donald Trump’s campaign to curb Iran-linked groups’ influence in Iraq, which has long walked a tightrope between its two closest allies, Washington and Tehran.
The US warning was delivered repeatedly over the past two months by the US Charge d’Affaires in Baghdad, Joshua Harris, in conversations with Iraqi officials and influential Shi’ite leaders, according to three Iraqi officials and one source familiar with the matter who spoke to Reuters for this story. The message was delivered to some heads of Iran-linked groups via intermediaries, they said.
Harris and the embassy did not respond to requests for comment. The sources requested anonymity to discuss private discussions.
Since taking office a year ago, Trump has acted to weaken the Iranian government, including via its neighbor Iraq.
Iran views Iraq as vital for keeping its economy afloat amidst sanctions and long used Baghdad’s banking system to skirt the restrictions, US and Iraqi officials have said. Successive US administrations have sought to choke that dollar stream, placing sanctions on more than a dozen Iraqi banks in recent years in an effort to do so.
But Washington has never curtailed the flow of dollars from the oil revenues of Iraq, a top OPEC producer, sent via the Federal Reserve Bank of New York to the Central Bank of Iraq. The US has had de facto control over Iraq’s oil revenue since it invaded the country in 2003.
Iraqi Prime Minister Mohammed Shia al-Sudani’s office, the Central Bank of Iraq, and Iran‘s mission at the United Nations did not respond to requests for comment.
“The United States supports Iraqi sovereignty, and the sovereignty of every country in the region. That leaves absolutely no role for Iran-backed militias that pursue malign interests, cause sectarian division, and spread terrorism across the region,” a US State Department spokesperson told Reuters, in response to a request for comment.
The spokesperson did not answer Reuters questions about the sanction threats.
Trump, who bombed Iran‘s nuclear facilities in June, threatened to again intervene militarily in the country during protests last week.
NO ARMED GROUPS IN NEW GOVERNMENT
Among the senior politicians to whom Harris’ message was passed were Prime Minister Sudani, Shi’ite politicians Ammar Hakim and Hadi Al Ameri, and Kurdish leader Masrour Barzani, three of the sources said.
The conversations with Harris started after Iraq held elections in November in which Sudani’s political bloc won the single-largest bloc of seats but in which Iran-backed militias also made gains, the sources said.
The message centered on 58 members of parliament views by the US views as linked to Iran, all the sources said.
“The American line was basically that they would suspend engagement with the new government should any of those 58 MPs be represented in cabinet,” one of the Iraqi officials said. The formation of a new cabinet could still be months away due to wrangling to build a majority.
When asked to elaborate “they said it meant they wouldn’t deal with that government and would suspend dollar transfers,” the official said.
The US has had de facto control over oil revenue dollars from Iraq, a top OPEC producer, since it invaded the country in 2003.
Iran has long supported an array of armed factions in Iraq. In recent years, several have entered the political arena, standing for election and winning seats as they seek a slice of Iraq’s oil wealth.
Renad Mansour, director of the Iraq Initiative at London’s Chatham House think tank, said armed groups were increasingly benefiting from positions in Iraq’s massive bureaucracy and so took the threat of cutting dollar flows seriously.
“The US has significant leverage,” he said. “The threat of the loss of access to US dollars, which is how Iraq’s economy functions through the sale of oil, has made it very concerning.”
WASHINGTON OPPOSES FIRST DEPUTY SPEAKER
One of the people Washington objects to is Adnan Faihan, a member of the powerful, Iran-backed political and armed group Asaib Ahl al-Haq (AAH), who was elected first deputy speaker of parliament in late December, the Iraqi official and the source with knowledge of the matter said.
They said the US opposed Faihan’s appointment to the post.
In a sign the pressure campaign was working, AAH leader Qais al-Khazali communicated a willingness to the Americans to remove Faihan as deputy speaker, the Iraqi official said. Faihan currently remains in his position.
The AAH media office and Faihan did not immediately respond to a request for comment and neither did Faihan.
In the last government, AAH held the education ministry, and Iraqi officials say it is seeking to participate in the next government too.
AAH was a key group in a sophisticated oil smuggling network generating at least a $1 billion a year for Iran and its proxies in Iraq, sources previously told Reuters.
Khazali was sanctioned by Washington in 2019 for AAH’s alleged role in serious human rights abuses, related to the killing of protesters in Iraq that year and other violence, including a 2007 attack that killed five US soldiers. At the time, he dismissed the sanctions as unserious.
DOLLAR CONTROL
Iraq holds the bulk of proceeds from its oil export sales at a Central Bank of Iraq account at the Federal Reserve Bank of New York.
Though it is a sovereign account of the Iraqi state, the arrangement gives the US practical control over a critical choke point of Iraqi state revenues, making Baghdad reliant on Washington’s goodwill.
“US efforts to achieve stability in the region are focused on ensuring states retain their sovereignty and can achieve security through mutual economic prosperity,” the State Department spokesperson said in their reply to Reuters questions.
The move to pressure Baghdad with a possible suspension of dollars takes place as the US begins marketing Venezuelan oil, which followed the capture of Venezuelan leader Nicolas Maduro in Caracas by US forces and his transfer to New York to be put on trial in relation to drug charges.
The US Department of Energy has said all proceeds from Venezuelan oil sales would be initially settled in US-controlled accounts at globally recognized banks.
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Republican Rep. Calls on Georgia Hospital to Cut Ties With Iranian Regime-Connected Physician
Rep. Buddy Carter (R-GA) Source: Youtube
Rep. Buddy Carter (R-GA) has called on Emory University and Georgia medical regulators to fire a physician with familial ties to a top Iranian official, amid international furor against that official for his role in the brutal suppression of protests in Iran.
In a letter dated Jan. 22, the Carter urged Emory University to terminate Dr. Fatemeh Ardeshir-Larijani’s appointment and asked the Georgia Composite Medical Board to revoke her medical license, arguing that her connection to her father, Ali Larijani, poses national security and patient trust concerns. The letter contends that allowing someone with such ties to practice medicine in the United States is “unacceptable,” especially given recent U.S. actions targeting Iran’s leadership and repression apparatus.
“Allowing an individual with immediate familial ties to a senior official actively calling for the death of Americans to occupy such a position poses a threat to patient trust, institutional integrity, and national security,” Carter wrote.
The U.S. Department of the Treasury this month sanctioned Larijani, who serves as Secretary of Iran’s Supreme National Security Council, for his role in coordinating the Iranian government’s violent crackdown on peaceful protesters that erupted in late 2025 and continued into January 2026. According to the Treasury, Larijani publicly called on security forces to use force against demonstrators demanding basic rights, and his actions are tied to thousands of deaths and injuries.
Those sanctions, announced Jan. 15 by Treasury Secretary Scott Bessent, target Larijani along with nearly two dozen other officials and shadow banking networks that finance the Iranian regime’s repression and global destabilizing activities. The move is part of a broader U.S. effort to increase economic pressure on Tehran, using executive authorities related to human rights abuses and support for terrorism.
The sanctions designation bars Larijani and the other named individuals from the U.S. financial system and prohibits American persons and companies from conducting business with them. Treasury officials said the measures also aim to disrupt the financial networks that allow Iran’s elite to launder revenue from petroleum and petrochemical sales funds that the U.S. says are diverted to repression and support for proxy groups abroad.
Larijani’s role in the crackdown has also been highlighted by a former Iranian government insider, who spoke with the IranWire outlet, alleging that Larijani played a central role in orchestrating the January 2026 suppression drawing comparisons to historic violent suppressions and suggesting the strategy was part of internal power consolidation within Iran’s leadership.
Protests that began in Iran in December have left at least 5,000 people dead, more than 7,300 injured and upwards of 26,800 detained, according to the U.S.-based Human Rights Activists News Agency. The unrest was initially sparked by rapidly deteriorating economic conditions, skyrocketing inflation, and a plummeting currency. However, the demonstrations quickly expanded into a wider movement opposing the country’s ruling establishment. Iranian authorities released their first official death toll on Wednesday, reporting 3,117 fatalities. The government said 2,427 of those killed were civilians or members of the security forces, while the remainder were labeled “terrorists,” without offering a detailed accounting of civilian versus security force casualties.
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Iran Claims Long-Range Missile Progress as US Boosts Military Presence Amid Deadliest Crackdown Since 1979
Iran’s Supreme Leader Ayatollah Ali Khamenei speaks during a meeting in Tehran, Iran, Jan. 17, 2026. Photo: Office of the Iranian Supreme Leader/WANA (West Asia News Agency)/Handout via REUTERS
Iran claimed this week it successfully tested its first intercontinental ballistic missile (ICBM) capable of striking the US’s East Coast, as Washington bolsters its military presence in the region and tensions soar amid Tehran’s intensifying crackdown on protesters.
According to state-affiliated media, the Iranian government conducted a successful missile launch test this week from an Islamic Revolutionary Guard Corps (IRGC) base in Semnan, a city in north-central Iran, firing it toward Siberia with Russia’s approval.
Even though the missile was reported to have a range of up to 3,700 miles, it is unclear whether it reached its target, as the launch video shows little beyond a projectile soaring through the clouds.
Last year, a report from the US Defense Intelligence Agency (DIA) warned that Iran could possess up to 60 intercontinental ballistic missiles by 2035, signaling the regime’s growing long-range strike capabilities and the potential future threat to the US and its allies.
“Missile threats to the US homeland will expand in scale and sophistication in the coming decade,” the report said. “North Korea has successfully tested ballistic missiles with sufficient range to reach the entire Homeland, and Iran has space launch vehicles it could use to develop a militarily viable ICBM by 2035 should Tehran decide to pursue the capability.”
Meanwhile, as regional tensions mount over the regime’s brutal crackdown on anti-government protests, the United States has moved a range of military assets into the area — including the USS Abraham Lincoln and its strike group.
In the last few weeks, President Donald Trump has repeatedly warned that he may take “decisive” military action against Iran if the regime continues killing protesters.
“We’re watching Iran,” Trump said on his way back from the World Economic Forum in Davos. “I’d rather not see anything happen but we’re watching them very closely.”
“We have a large fleet moving into the region. We’ll see what happens if we have to use it,” he continued. “We are building a very large force there, and we are closely monitoring their actions.”
For his part, Iranian President Masoud Pezeshkian on Thursday accused the United States and Israel of fueling the widespread anti-government protests, calling it a “cowardly revenge … for the defeat in the 12-Day War.”
IRGC commander Gen. Mohammad Pakpour also threatened Israel and the United States over any potential military action, warning them to “avoid any miscalculations” to prevent what he described as a “more painful and regrettable fate.”
“The Islamic Revolutionary Guard Corps and dear Iran have their finger on the trigger, more prepared than ever, ready to carry out the orders and measures of the supreme commander-in-chief,” Pakpour was quoted as saying by local media.
With pressure mounting at home and abroad, experts say it remains unclear how Tehran will respond — whether by escalating militarily beyond its borders or by offering limited concessions to ease sanctions and mend ties with the West.
The nationwide protests, which began with a shopkeepers’ strike in Tehran on Dec. 28, initially reflected public anger over the soaring cost of living, a deepening economic crisis, and the rial — Iran’s currency — plummeting to record lows amid renewed economic sanctions, with annual inflation near 40 percent.
With demonstrations now stretching over three weeks, the protests have grown into a broader anti-government movement calling for the fall of Khamenei and Iranian President Masoud Pezeshkian and even a broader collapse of the country’s Islamist, authoritarian system.
According to the US-based human rights group HRANA, 4,519 people have been killed during the protests, with another 9,049 fatalities under review. At least 5,811 people have been injured, and 26,314 arrests have been recorded.
Iranian officials have put the death toll at 5,000 while some reports indicate the figure could be much higher.
On Friday, the UN Human Rights Council said that the current wave of violence against protesters is “the deadliest crackdown since the 1979 Islamic Revolution,” citing credible evidence that the actual death toll is “much higher” than official figures, which already run into the thousands.
With Iranian authorities maintaining an internet blackout for over two weeks, the actual number of casualties remains difficult to verify. Activists fear the internet shutdown is being used to conceal the full extent of the crackdown on anti-regime protests.
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Jewish K-12 Teachers in US Report Facing Rampant Antisemitism on the Job Amid Rising Incidents in Schools
A high school campus in Wyoming. Photo: USA TODAY Network via Reuters Connect.
Jewish K-12 teachers in the US face widespread antisemitic discrimination, harassment, and bullying in both public and non-Jewish private schools, according to preliminary results of a new survey conducted by the research arm of the StandWithUs advocacy group that were shared on Thursday.
The survey, to which the country’s leading scientific ethics committee conferred approval, found that 61.6 percent of the 584-person sample have been both targets and witnesses of antisemitic conduct in a professional setting. Meanwhile, nearly half suffered antisemitism perpetrated by their teachers unions, purportedly their advocates and representatives in collective bargaining.
School districts, obligated to comply with civil rights laws which proscribe discrimination, fail at prevention, according to the data. Of the 65 percent of respondents who said they are required to take anti-bias trainings, only 10 percent said those trainings address antisemitism.
“This first of its kind empirical study sought to understand antisemitism experienced by Jewish educators in K-12 education. Over 60 percent of respondents reporting that they personally experienced or witnessed antisemitism in their profession is an astounding number,” StandWithUs data and analytics director Dr. Alexandra Fishman said in a statement. “StandWithUs is deeply committed to rigorous research that serves both academic and lay audiences.”
She added, “While this study is being prepared for peer review, we are releasing some results now because Jewish educators cannot wait for academic publishing timelines to address the discrimination they face daily in our schools.”
Alyson Brauning, interim chair of the National Education Association’s Jewish Affairs Caucus, added, “These findings, while disturbing, do not come as a shock. They reveal a serious disconnect between stated commitments to equity and the lived realities of Jewish educators.”
K-12 antisemitism has been fostered by the importation of anti-Zionist ideologies into the classroom, multiple advocacy groups have said.
On Tuesday, StandWithUs, joined by the North American Values Institute (NAVI), wrote to New York City’s public schools chancellor about the local United Federation of Teachers (UFT) union’s promotion of an anti-Israel event organized by a group which calls itself “NYC Educators for Palestine.” It targeted “kids ages 6-18,” according to social media screenshots included in the groups’ letter, violating New York City prohibition on indoctrinating schoolchildren with views held by schoolteachers.
“NYCPS [New York City Public Schools] teachers’ speech can be considered government speech, as opposed to private speech, depending on the context. The teachers involved in advertising and speaking at the event are proactively sharing their status and training as NYCPS teachers to attract attendance,” the groups said. “Doing so risks misleading families as to whether the event is sponsored or supported by the DOE [Department of Education].”
The UFT has been criticized for violating political neutrality before. According to a report published in September by the Defense of Freedom Institute (DFI), the union has gone from fostering popular support for anti-Zionism among students to seeking cover from government by placing one or more of its fellow travelers in high office. To that end, the UFT endorsed the New York City mayoral candidacy of Zohran Mamdani in July, calling the avowed socialist and Hamas sympathizer a potential “partner.”
Civil rights groups have argued that pushing anti-Zionism in the classroom can have a profound impact on students, who in many cases perpetrate antisemitic incidents. On Thursday, for example, local media reported that two 15-year-olds were arrested on suspicion of having graffitied 60 swastikas all over a playground in Brooklyn.
“Words are not enough. Condemning is not enough,” community activist Devorah Halberstam told local station WABC. “There has to be change. Immediate change.”
Follow Dion J. Pierre @DionJPierre.